IN THE HIGH COURT OF DELHI AT NEW DELHI CO.PET. 249/2006. Date of Decision: 8th December, versus

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1 IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : COMPANIES ACT, 1956 CO.PET. 249/2006 Date of Decision: 8th December, 2011 M/S ARROMA CHEMICALS... Petitioner Through Ms. Madhurima Tatia, Advocate versus M/S. GATEWAY SPECIALITY PAPERS LTD. & ANR.... Respondents Through Mr. Deepak Kumar Vijay, Advocate for R-1. Ms. Neeru Sharma, Advocate for R-2. CORAM: HON'BLE MR. JUSTICE MANMOHAN J U D G M E N T MANMOHAN, J : (Oral) 1. Present winding up petition has been filed under Section 433(e) read with Sections 434 and 439 of the Companies Act, 1956 (for short Act ) stating that the respondent no.1-company is unable to pay its debts allegedly amounting to ` 2,38,160/-. 2. It is the petitioner s case that on 18th March, 2004 respondent no. 1- company placed a purchase order on the petitioner for supply of paper dyes. According to petitioner, as its invoices were unpaid for a long period of time, it requested the respondent no. 1-company to make the payment. Learned counsel for the petitioner has also drawn the attention of this Court to the petitioner s own ledger account at page 23 of the paper book.

2 3. On 15th April, 2004, respondent no. 1-company requested the petitioner to send complete statement of accounts for the financial year in respect of all its group companies at its head office at C-55, Wazirpur Industrial Area, New Delhi On 16th November, 2004, respondent no. 1-company informed the petitioner that its management had been taken over by M/s. Shree Shyam Pulp & Board Mills Ltd. By this letter, respondent no. 1-company confirmed that an amount of ` 2,38,160/- was due and payable to the petitioner as on 26th July, 2004 and that the said amount would be paid by the new management. This letter was signed on behalf of respondent no. 1- company by its Director Mr. Narendra Kumar Goyal. 5. On 11th March, 2005, M/s. Gateway Industries Ltd. wrote to petitioner stating that it had been operating from its corporate office at 4806/24, Bharat Ram Road, Darya Ganj, New Delhi and that all future communications with regard to Gateway group companies should be sent at the said address only. 6. On 18th June, 2005, M/s. Gateway Industries Ltd. wrote another letter to the petitioner stating that it had handed over total management of two companies, namely, M/s. Gateway Specialty Papers Ltd. and M/s. Gateway Coated Papers (P) Ltd. to M/s. Shree Shyam Pulp & Board Mills Ltd. and in view of the same, petitioner should contact the new management for payment of its dues. 7. On 27th June, 2005, petitioner wrote back to respondent no.1-company stating that though they contacted M/s. Shree Shyam Pulp & Board Mills Ltd. for payment, yet they had not received any payment till date. 8. Consequently, on 20th July, 2005, the petitioner issued a statutory winding up notice under Section 434 of the Act to respondent no. 1- company. The said notice was dispatched to respondent no.1-company s office at C-55, Wazirpur Industrial Area, Delhi as well as at 4806/24, Bharat Ram Road, Darya Ganj, New Delhi. However, as no response was received to the statutory notice, petitioner filed the present winding up petition. 9. Mr. Deepak Kumar Vijay, learned counsel for the respondent no.1- company submitted that the present winding up petition was not maintainable as no statutory winding up notice had been served by the

3 petitioner upon respondent no.1-company s registered office. In this connection, he relied upon three Form No. 18 dated 15th May, 2004, 19th July, 2004 and 2nd December, 2004 to show that the respondent no.1- company had initially shifted its registered office w.e.f. 25th April, 2004 from 4806/24, Bharat Ram Road, Ansari Road, Darya Ganj, New Delhi to C-55, Wazirpur Industrial Area, Delhi and thereafter w.e.f. 19th July, 2004 to A-257, Road No. 6, Mahipal Pur Extn., New Delhi and lastly w.e.f. 20th November, 2004 to A-416A, Road No. 6, Mahipal Pur Extn., New Delhi. According to Mr. Vijay, as the winding up notice had not been served upon the respondent no.1-company at its last registered office, the fiction as enumerated under Section 434 of the Act was not attracted to the present case. In this connection, he relied upon a judgment of this Court in State Black Sea Shipping Company Vs. M/s. Viraj Overseas Pvt. Ltd., (2003) V AD (Delhi) Mr. Vijay further submitted that there was no admission of debt by respondent no. 1-company, namely, M/s. Gateway Specialty Papers Ltd. He contended that the petitioner in its winding up petition had erroneously relied upon the correspondence with M/s. Gateway Industries Ltd. which had no privity of contract with the petitioner. He also submitted that Mr. Narendra Kumar Goyal had ceased to be a Director of the respondent no.1- company w.e.f. 19th July, 2004 and, therefore, none of the letters written by him could be relied upon by the petitioner. 11. Mr. Vijay lastly submitted that no postal receipt had been filed by the petitioner to show that notice for winding up had in fact been issued by the petitioner to respondent no.1-company at its registered office. 12. Having heard the parties at length this Court is of the view that the respondent no. 1-company vide its own letter dated 16th November, 2004 has admitted the petitioner s debt. The said letter is reproduced hereinbelow:- GATEWAY SPECIALITY PAPERS LTD. Head Office : C-55, Wazirpur Industrial Area, Delhi (INDIA) Tel. : , , Fax : (91) MANUFACTURERS OF : WRITING-PRINTING & SPECIALITY PAPERS M/s. Arroma Chemical

4 Delhi. 16th Nov. 04 Dear Sir, We wish to inform you that we have handed over the management of our Paper Mill to M/s. Shree Shyam Pulp & Board Mills Ltd. Their office is located at: Shree Shyam Pulp & Board Mills Ltd. A-257, Road No. 6, National Highway Mahipalpur Extn., New Delhi Contact Person : Mr. Amit Gupta Tel.No.: /70 As per our records, we confirm that an amount of Rs. 2,38,160/- is payable to you as on 26th July, 2004 and there is an understanding that the new management will make the payment of the above amount on the existing payment terms. You are requested to please contact the above party for the aforesaid payment. However, in case you find any difficulty in getting the payment from them, please contact us. Also please note that for any future business dealings we will not be responsible for any payment. Thanking you and assuring you of our best services & cooperation at all times, Yours faithfully For GATEWAY SPECIALTY PAPERS LTD. Sd/- NARENDRA KUMAR GOYAL DIRECTOR

5 13. From the aforesaid letter, it is apparent that there is an admission of debt by respondent no.1-company itself and not by any other group company of respondent no This Court is of the view that Mr. Narendra Kumar Goyal was competent to execute the aforesaid letter on the said date as he had resigned as Director of respondent no.1-company only on 14th December, 2004 as is apparent from Form No. 32 at page 84 of the paper book filed by the respondent no.1- company. Consequently, there is an admission of debt on the part of respondent no.1-company to the extent of ` 2,38,160/ As far as the issue of service of statutory winding up notice is concerned, it is apparent from reading of Section 434 of the Act that same has to be delivered at the registered office of the opposite party. However, on a perusal of the correspondence placed on record especially the respondent no.1-company s own letter dated 15th April, 2004 and M/s. Gateway Industries Limited s letter dated 11th March, 2005, it is apparent that it was the respondent who specifically requested the petitioner to send all correspondence with regard to Gateway Group of Companies to C-55, Wazirpur Industrial Area, New Delhi and at the address of M/s. Gateway Industries Ltd., i.e., 4806/24, Bharat Ram Road, Darya Ganj, New Delhi. The aforesaid letters dated 15th April, 2004 and 11th March, 2005 are reproduced hereinbelow:- A) Letter dated 15th April, 2004 :- GATEWAY SPECIALITY PAPERS LTD. Head Office : C-55, Wazirpur Industrial Area, Delhi (INDIA) Tel. : , Fax : MANUFACTURERS OF : WRITING-PRINTING & SPECIALITY PAPERS Date : 15/04/2004 TO M/s. Arroma Chemicals D-404, Shiromani Opp. Ocean Park, Nr. Nehru Nagar Satellite Road

6 Ahmedabad Sub: Statement of Account for F.Y Dear Sir, This is inform you that our audit for Financial Year is under process and for finalization of accounts, our auditor require Confirmation of Account from your Company. You are therefore requested to send us the complete Statement of Account for the financial year in respect of all our group companies at the following address :- GATEWAY SPECIALTY PAPERS LIMITED C-55, WAZIRPUR INDUSTRIAL AREA NEW DELHI Your early action in the matter is highly appreciated. Thanking you Yours faithfully For Gateway Specialty Papers Limited Sd/- Authorised Signatory B) Letter dated 11th March, 2005 :- Gateway Industries Ltd. 4806/24, Bharat Ram Road, Darya Ganj, New Delhi Tel.: , Fax: info@gatewaypapers.com Web : 11tth March, 2005

7 To AROMA CHEMICALS D-404, SHIROMANI OFFICE COMPLEX NEW NEHRU NAGAR, SATELLITE ROAD, AHMEDABAD Tel: (079) FAX: (079) Kind attn.: Mr. Arun Bhandari Dear Mr. Bhandari, We are in receipt of your letter dated 28/02/05 sent at our C-55 Wazirpur address, and are looking into the matter. Please note, for quite some time, we have been operating from our Corporate office at the following address:- Gateway Industries Ltd. 4806/24, Bharat Ram Road, Darya Ganj, New Delhi Ph / Fax: You are, therefore, requested to please send all your future communications with regard to all our GATEWAY GROUP Companies at the above address only. Thanking you Yours faithfully, Sd/- B L AGGARWAL PS TO MD 16. In fact, in State Black Sea Shipping Company (supra) this Court has clearly stipulated that before issuing a winding up notice, the petitioner is

8 obliged to conduct an enquiry and collect information and then only issue a statutory notice. Since in the present case, it was at the respondent no.1- company s own request that all correspondence be sent at a particular address only, that the petitioner issued the winding up notice to C-55, Wazirpur Industrial Area, New Delhi In the opinion of this Court, the act of the respondent no.1-company in requesting the petitioner to send all correspondence at a particular address, amounts to a waiver of its right to receive the winding up notice at its registered office. The respondent no.1- company is estopped from raising the plea that the respondent no.1- company did not receive the winding up notice at its registered office. This Court is fortified in its view by the observation of the Supreme Court in Krishna Bahadur vs. Purna Theatre & Ors. (2004) 8 SCC 229 to the following effect:- 10. A right can be waived by the party for whose benefit certain requirements or conditions had been provided for by a statute subject to the condition that no public interest is involved therein. Whenever waiver is pleaded it is for the party pleading the same to show that an agreement waiving the right in consideration of some compromise came into being. Statutory right, however, may also be waived by his conduct. 18. In fact, it seems to this Court that the act of respondent no.1- company after having shifted its registered office and still insisting that all correspondence should be sent to a different address, was nothing but leading the petitioner down the garden path. Further, in the opinion of this Court, if the contention of the respondent no.1- company is accepted, it would amount to allowing the respondent no.1-company to take benefit of its own wrong. Enunciating this principle which is based on Latin maxim commodum ex injuria sua nemo habere debet (no party can take undue advantage of his own wrong), the Supreme Court in Kusheshwar Prasad Singh vs. State of Bihar & Ors. (2007) 11 SCC 447 has held as under:- 15. This Court (at SCC p. 142, para 28) referred to Broom s Legal maxims (10th Edn.), p. 191 wherein it was stated: It is a maxim of law, recognised and established, that no man shall take advantage of his own wrong; and this maxim, which is based on elementary principles, is fully recognised in courts of law and of equity, and, indeed, admits of illustration from every branch of legal procedure

9 16. It is settled principle of law that a man cannot be permitted to take undue and unfair advantage of his own wrong to gain favourable interpretation of law. It is sound principle that he who prevents a thing from being done shall not avail himself of the non-performance he has occasioned. To put it differently, a wrongdoer ought not to be permitted to make a profit out of his own wrong. 19. The registered A.D. cards clearly showing receipt of the statutory winding up notice by the respondent no.1-company have already been placed on record by the petitioner. 20. In view of the aforesaid, the defence set out by respondent no.1-company is a sham and moonshine. Accordingly, respondent no.1-company is granted eight weeks time to pay the aforesaid debts to the petitioner. However, in the event the aforesaid amount is not paid, the present petition would stand admitted and the petitioner would be entitled to publish citations in the newspapers, namely, Statesman (English edition) and Veer Arjun (Hindi edition) as well as in Delhi Gazette. List on 23rd March, Sd/- MANMOHAN,J